Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said, "The first fiscal quarter's revenue came in at the higher end of our guidance range. The pullback from the prior quarter reflects the high degree of seasonality in our business, with the December quarter traditionally the weakest of the fiscal year. We planned for the decline and took appropriate actions at the beginning of the quarter to accelerate our cost- containment programs. As a result, we reduced our operating expenses by 10% compared to the prior quarter, further strengthened our balance sheet and maintained a strong gross margin."

Net income was reduced by $1.8 million of adjustments related to the Company's RISC (Research Incentive Scheme for Companies) grant.

Without this item net income would have been $5.4 million or $0.07 per share.

Total cash and short-term investments were $494.2 million on December 29, 2012, a $53.9 million increase from the prior quarter ended September 29, 2012.

Second Quarter Fiscal Year 2013 Outlook

The Company expects net revenue in the second fiscal quarter of 2013 ending March 30, 2013 to be approximately $90 million to $100 million.

Looking forward, Bruno Guilmart commented, "We expect our business to improve as we move through the fiscal year based on normal market seasonality combined with the ongoing copper transition. In general, we normally gain increased visibility from customers after the Chinese New Year Holiday. We remain confident in our long-term business prospects given the strength of our existing equipment portfolio and development pipeline, our market leadership positions, and our strong balance sheet."

Earnings Conference Call Details

A conference call to discuss these results will be held today, January 29, 2013, beginning at 8:00 am (EST). To access the conference call, interested parties may call +1-877-407-8037 or internationally +1-201-689-8037. The call will also be available by live webcast at www.kns.com/investors/events.

A replay will be available from approximately one hour after the completion of the call through February 5, 2013 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 407421. A webcast replay will also be available at www.kns.com/investors/events.

About Kulicke & Soffa

Kulicke & Soffa (NAS: KLIC) is a global leader in the design and manufacture of semiconductor and LED assembly equipment. As a pioneer in this industry, K&S has provided customers with market leading packaging solutions for decades. In recent years, K&S has expanded its product offerings through strategic acquisitions, adding wedge bonding and a broader range of expendable tools to its core ball bonding products. Combined with its extensive expertise in process technology, K&S is well positioned to help customers meet the challenges of assembling the next-generation semiconductor and LED devices. (www.kns.com)

Caution Concerning Results and Forward Looking Statements

In addition to historical statements, this press release contains statements relating to future events and our future results. These statements are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, and include, but are not limited to, statements that relate to our future revenue, sustained, increasing, continuing or strengthening demand for our products, the continuing transition from gold to copper wire bonding, replacement demand, our research and development efforts, our ability to identify and realize new growth opportunities and our ability to control costs. While these forward-looking statements represent our judgments and future expectations concerning our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: the risk that customer orders already received may be postponed or canceled, generally without charges; the risk that anticipated customer orders may not materialize; the risk that our suppliers may not be able to meet our demands on a timely basis; the volatility in the demand for semiconductors and our products and services; a slowdown of transition from gold to copper wire bonding by our customers and the industry, volatile global economic conditions, which could result in, among other things, sharply lower demand for products containing semiconductors and for the Company's products, and disruption of capital and credit markets; the risk of failure to successfully manage our operations; acts of terrorism and violence;risks, such as changes in trade regulations, currency fluctuations, political instability and war, which may be associated with a substantial non-U.S. customer and supplier base and substantial non-U.S. manufacturing operations;and the factors listed or discussed in Kulicke and Soffa Industries, Inc. 2012 Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission. Kulicke & Soffa Industries, Inc is under no obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share and employee data)

(Unaudited)

Three months ended

December 29,

December 31,

2012

2011

Net revenue:

Equipment

$

99,902

$

106,149

Expendable Tools

14,137

13,875

Total net revenue

114,039

120,024

Cost of sales:

Equipment

56,432

59,004

Expendable Tools

6,082

5,744

Total cost of sales

62,514

64,748

Gross profit:

Equipment

43,470

47,145

Expendable Tools

8,055

8,131

Total gross profit

51,525

55,276

Operating expenses:

Selling, general and administrative

26,030

25,240

Research and development

18,253

14,148

Amortization of intangible assets

2,293

2,295

Restructuring

744

1,217

Total operating expenses

47,320

42,900

Income from operations:

Equipment

1,745

9,877

Expendable Tools

2,460

2,499

Total income from operations

4,205

12,376

Other income (expense):

Interest income

174

260

Interest expense

-

(242

)

Interest expense: non-cash

-

(1,910

)

Income from operations before income taxes

4,379

10,484

Provision for income taxes

775

1,977

Net income

$

3,604

$

8,507

Net income per share:

Basic

$

0.05

$

0.12

Diluted

$

0.05

$

0.11

Weighted average shares outstanding:

Basic

74,852

73,540

Diluted

76,209

74,628

Three months ended

December 29,

December 31,

Supplemental financial data:

2012

2011

Depreciation and amortization

$

4,802

$

4,258

Capital expenditures

$

1,616

$

1,498

Equity-based compensation expense:

Cost of sales

$

148

$

85

Selling, general and administrative

2,326

1,611

Research and development

727

403

Total equity-based compensation expense

$

3,201

$

2,099

As of

December 29,

December 31,

2012

2011

Backlog of orders

$

71,000

$

88,000

Number of employees

2,609

2,735

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

December 29,

September 29,

2012

2012

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

494,170

$

440,244

Restricted cash

2,900

-

Accounts and notes receivable, net of allowance for doubtful accounts of $1,019 and $937, respectively